EIA: Clean Energy Momentum Is Here to Stay

The U.S. Energy Information Administration (EIA) this week released its annual long-term forecast for America’s energy system. This year’s big message: despite the administration’s efforts to bolster dirty energy, the nation is still becoming cleaner and more efficient every day.

And while the United States needs to transition to clean energy much faster, the newest Annual Energy Outlook (AEO) from the government’s energy statistical agency proves that doing so is not only the best choice for our climate, it’s also increasingly the most economic option.

Thanks to recent energy innovation, the U.S. is already decades ahead of where we thought we’d be from the EIA report projections from just 10 years ago. Each new annual forecast indicates that a safer climate future is more readily achievable than thought before. Just imagine how much cleaner the future will be if we continue to support and cultivate energy innovation and progress nationally and locally.

The EIA report is helpful in providing policymakers and the public with a better understanding of what our energy system may look like and where our energy may come from in the next five, and even the next 30, years, based on what we know about the energy system today. While this report provides useful insight, it is prepared with a lag in incorporating the most recent information on important dynamics such as the rapidly declining costs of clean energy technologies and state and local climate action in the power sector. It is a challenge to keep pace with these changes, and even though EIA has improved its methodology over the years, its conservative AEO forecasts traditionally underestimate the potential for clean energy progress.

Here are some big takeaways from this year’s report:

Clean energy remains fastest-growing resource for next 30 years

A dramatic shift has taken place over the past several years in the electricity markets where utilities buy power, as wind and solar have become the cheapest source in many regions of the country. In certain areas, building new solar and wind can even be cheaper than just running existing coal plants. So it’s no surprise that the newest EIA report projects that solar and wind will continue to dominate the market for new power capacity.

Almost two-thirds of all new electricity generation added between now and 2050 is expected to come from wind and solar energy. By 2050, renewables generation is anticipated to more than double, and could power over 165 million households a year. EIA says that by 2034, renewables will be the second-largest source of power (up from No. 4 today)—surpassing coal and nuclear. As this chart shows, the government a decade ago predicted coal would be the fastest-growing and largest source of power, supplying 55 percent of all electricity by 2030, and wind and solar providing just 2.5 percent of power by 2030.

In the next four years, most expect wind will dominate the picture. Another 40 gigawatts (GW) is projected to come online in just the next three years. That’s huge—and equal to about half of all wind power capacity built between 1990 and 2016. By 2019, wind will become the top source of renewable generation—beating hydropower for the first time.

However, by the mid-2020s, solar is expected to take center stage. Over the next three decades, solar is expected to grow by over 7 percent a year—twice as fast as any other source—resulting in a ten-fold increase in solar power between now and 2050. By 2050, solar is estimated to make up 14 percent of the country’s generation mix—up from just 1 percent today. This new forecast is almost 25 percent higher than the last year’s AEO forecast. The contrast is even more stark if you look at projections from a decade ago. In 2008, utility-scale solar capacity was expected to grow to just 390 megawatts (MW) by 2030. But as of last year, we already had 25,000 MW operating (65 times more than the 2008 projection for 2030). The new report released yesterday shows over 75,000 MW of utility solar by 2030 (or 192 times more solar than projected a decade ago).

Coal’s fate still gloomy: federal efforts won’t reverse declines

With cleaner and cheaper options available, EIA predicts coal will continue to lose market share to renewables and natural gas. Over 60 GW of coal capacity has retired since 2010. Despite the administration’s best efforts, another 65 GW will disappear in the next decade, due mainly to economic pressures. EIA predicts that by 2030, only about 55 percent of coal plants will still be operating compared to coal’s peak in 2011 as coal power falls from half to one-quarter of total energy generation.

Fuel standards and EVs will greatly reduce oil dependence

Improved vehicle efficiency and the rise of electric vehicles are expected to radically change our transportation sector. Despite projected population growth and EIA’s expectation of increases in miles traveled, gasoline use is predicted to decrease by over 30 percent between 2017 and 2050—saving consumers money at the pump and reducing the nation’s dependence on foreign oil.

This is thanks mainly to fuel efficiency standards: by 2050, the average car is projected to be 66 percent more efficient than today. As hybrid and electric vehicles become cheaper and more widely available, they are expected to become a mainstream choice, growing from 4 percent of the market today to more than 20 percent in 2050.

Our carbon footprint is still falling, but not enough  

EIA’s report confirms that we can cut climate-warming carbon pollution while growing our economy. Economy-wide carbon pollution was about 20 percent lower in 2017 than EIA projected a decade ago. That overestimation is almost equal to the carbon pollution from all U.S. coal plants last year. Now EIA expects carbon pollution to fall slightly over the next two decades, even as our economy grows by 60 percent.

The new EIA report shows power sector emissions remaining relatively flat at 28 percent below 2005 levels through 2030. By the end of last year, carbon emissions were already at 27 percent below 2005. This is close to, but not in compliance, with the targets under the Clean Power Plan (CPP), which set the first-ever limits on power sector carbon pollution. The readily achievable targets were expected to lead to emissions reductions of 32 percent below 2005 levels, but Trump’s EPA is attempting to repeal the CPP.

Despite continued progress reducing the nation’s carbon footprint, unfortunately U.S. economy-wide emissions are significantly off-track to meet the Paris Accord target of 26 to 28 percent below 2005 levels. Instead, EIA predicts they will only decrease 15 percent by 2025 under current policies.

In any case, we have important work ahead. More clean energy and climate action is necessary. Even with falling costs and the remarkable growth in renewable energy, energy efficiency, and clean vehicles, much more can be done to support and accelerate the clean energy future we need to meet our climate goals. Local, state, and federal entities all have a role to play—and NRDC is working hard to defend against federal energy rollbacks and encourage states, cities, and companies to take the lead on climate action and clean energy now.